European Commission to accelerate decision on Greek bailout

The European Commission’s head of economic and monetary affairs Olli Rehn has said that the necessity of a third bailout for Greece could be decided as soon as next month, saying international lenders will “intensify” work on this from September onwards.

He told journalists that the European Union, European Central Bank and International Monetary Fund (IMF) first need to establish the facts, "and then conclude what kind of additional financing needs there are". Rehn said that ensuring debt sustainability through 2015 and 2016 is a priority, and the troika "will intensify our work (on this) from September onwards" and make concrete proposals soon after.

The IMF has estimated that Greece will need an additional €11bn (£9.4bn) to help it through to 2015 – a number that German finance minister Wolfgang Schauble has said is “not completely unrealistic”. An €11bn bailout would be tiny in comparison to the €230bn already received by the country.

Schauble caused chaos last week when he said more explicitly than ever that Greece would need a third bailout – a surprising move ahead of the elections in September. The German government quickly sought to downplay the statement, with chancellor Angela Merkel saying that any decision on the details of a potential bailout would not be made before mid-2014.

Speaking at an economic conference in Austria today, Rehn added that Italy must still meet its fiscal targets after last night's parliamentary agreement to scrap a property tax.

The essential thing was that Prime Minister [Enrico] Letta reconfirmed that Italy will stick to its fiscal targets in line with its European commitments. That's important.